Products & RisksPregunta 6 de 125
An investor buys a $1,000 par bond with a 5% coupon at a price of 80. What is the current yield?
a.6.25%
b.5.00%
c.4.00%
d.8.00%
Explicación
Current yield equals annual coupon income divided by market price. The annual coupon is $50, and the market price is $800 (80% of par), so $50 / $800 = 6.25%.
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